The Federal Reserve is out of Federal funds rate options and now Congress is about to pass legislation which will be the largest bailout bill in the history of the world. Fannie Mae (FNM) and Freddie Mac (FRE) are now penny stocks with perhaps over 1000 bank failures yet to come. The American taxpayer will be told that they and their children will be writing big checks to rescue the Wall Street crooks and congressmen that caused all the problems, while receiving nothing in return.  

Anyone who has been following recent congressional hearings knows by now that this is unacceptable to Main Street, the voters who will be firing their congressmen for turning the USA into a socialist country.  It is also widely believed that this bailout bill may not be embraced by Wall Street because of its onerous terms even if passed. Finally, it will not provide sufficient liquidity for improving the rest of the economy.  

I finally bought Fannie Mae (FNM) yesterday at $4.77 after it had fallen another 20% on the day. 

Even though it fell another 10% before finally closing at $4.40, I believe it will be a great trade in the end. 

Now that the merger is behind Sirius (SIRI), the task at hand is to increase subscriber growth and revenue quickly. But with the automobile industry on the decline, the company must look to other marketing channels to drive sales. Netflix (NFLX) would be the perfect business partner for Sirius.

There are several similarities and differences between the two companies that would offer significant marketing synergies:

Senator Richard Shelby, Republican - Alabama, the ranking member for the Committee on Banking, Housing, and Urban Affairs has made several TV appearances lately discussing the progress being made on the mortgage bailout bill coming soon from Congress. No one yet knows what the full extent of the bailout bill will be, and they do not like calling it a bailout bill, but that is what it is no matter what it is. Here’s why:

When low income people go for an initial or refinancing mortgage loan they almost always include some aspect of bill consolidation into the loan in order for to qualify for it. I myself have had 5 conventional fixed rate loans and have included some bill consolidation into 3 of them to improve my cash flow as I upgraded to larger and larger homes. What this means is that other personal debts such as auto loans, credit card balances, and the like are included in the hundreds of billions of defaulting loans that we taxpayers will now subsidize.

One of the conditions for the proposed Sirius (SIRI) / XM Satellite Radio Merger (XMSR) is the set-aside of 4% of the spectrum for non-commercial programming without censorship. Many people think of this as educational programming, but there is a potential here for much more than just insightful education. 

Both Sirius and XM are participants in the National Alert System [NAS], which replaced the Emergency Broadcasting System in 1994.  However, the NAS has been found to be dangerously lacking. (See the article "National Alert System In Disarray".)

The Sirius (SIRI) /XM Satellite Radio (XMSR) merger has been under DOJ and now under FCC review for longer than the Iran hostage crisis. Jim Cramer has commented that the deal may not happen. How should the stockholders expect the two stocks to react, in terms of stock price, if the deal falls through because the FCC requires onerous conditions for the merger which cannot be accepted?

The US economy is in serious trouble due to the recent mortgage crisis and resulting inventory of houses on the market. The Federal Reserve has taken positive action, but has nearly reached the limits of what it can do by cutting the Federal Funds rate and backing illiquid institutions. There is an immediate critical need for a very large infusion of capital into the financial and housing markets.

The answer is staring the government in the face. One readily available large source of capital is individual IRAs, which hold many trillions of dollars. If these IRA funds could be released and directed to the mortgage lenders and to the housing market, we could possibly avert, or at least significantly shorten, the economic recession we now find ourselves in.

The Sirius/XM Satellite Radio Merger (SIRI, XMSR) has been under DOJ and now under FCC review for 335 days with no real end in sight.  For both stockholders and subscribers this is reminiscent of the Iran hostage crisis, which lasted 444 days. One only need review the comments posted on recent articles or listen to Jim Cramer to see that most everyone has lost patience with our government on this issue, especially with the FCC and Ayatollah Kevin Martin. 

Everyone from politicians to minority groups are weighing in on the deal demanding a slice of the pie, even though most of them have never invested a cent in either of the two companies and are not subscribers.  Politicians want to protect the public from commercial-free radio just as they did for cable TV.  

In my last article, Sirius Opportunity in Satellite Radio, I said that:

When XM/Sirius become the only game in town, they will have better leverage than those ruthless Wal-Mart purchasing agents. I have seen a considerable amount of feedback on that, most of it complaining about monopolistic practices.

The long awaited merger of Sirius (SIRI) and XM Satellite Radio (XMSR) is near FCC approval and investors would do well to jump in while the stock is down.

The deal was approved by the DOJ with no conditions attached and now awaits approval by the FCC. If BellSouth and AT&T (T) were allowed to merge back together after a painful divestiture, there is no way this deal can be blocked. It is going to happen. That is why both companies are putting off the Q1 stockholders meeting and have no intention of calling the deal off.